|Ing Uk Real Estate Income Trust
||EPS - Basic
||Market Cap (m)
|Real Estate Investment & Services
Real-Time news about Ing Uk (London Stock Exchange): 0 recent articles
|envirovision: Shoved my money back into IFD whilst its still around the 39p mark. Fantastic dividend yield there >9% PA trading reasonable discount to NAV and have little doubt that some stage 2011, it will zoom back to 46p as it did last September.
I also note anothet holding of mine at recent highs again today, IRP. Nice yield there too, but discount to NAV not as great albiet it debt situation slightly better.
All fun and games, still dont understand what drove the IRET price here, answers on a post card.|
|tiltonboy: I'm sure they won't mind me posting their summary:
Oriel View: Since we initiated coverage of IRET in November of last year the share price has made no progress, whilst the NAV has moved from 48.5p to 59p. As we highlighted in our Funds Commentary last week (07.12.10), the Oriel Real Estate team sees significant headwinds for the UK commercial real estate sector going forwards and in our view, internalisation, whilst being helpful, is largely tinkering at the edges. With leverage still high (at over 100% of NAV) and with no particular focus on prime property, we continue to prefer F&C Commercial Property (FCPT; ADD).|
|flying pig: another penny dividend; very welcome. sit back and relax.
We await the manager's report, and perhaps light at the end of the tunnel? At least the share price has recovered in recent months.|
|nickcduk: Read an interesting article on Hedge Funds de-leveraging their positions:-
Highlights how hedge funds have been drastically reducing their long positions and also the number of positions they hold. QVT have been culling their portfolio equally aggressively and are probably responsible for the collapse in share price here. They went below 3% in mid August and probably held around 10 million shares at that point. Once cleared the share price may begin to stabilise. Equally I think Moore macro were large holders in IERE.|
|nickcduk: Excellent news:-
Exactly what we were looking for from the company. A cut in the dividend and a portion of remaining profit to be used for a share buyback. Should help put a floor under the share price. It will also enhance dividend cover, increase eps and nav.|
|sleepy: chopshs and Skyship - thanks for your comments.
I can certainly see a case for including current liabilities. However they have historically been pretty stable and I would hope that they would continue to be so.
Due to the low LTV ratio it is tempting to see a covenant breach as not being too serious and certainly not disastrous for shareholders. However it would almost certainly result in an increased interest rate and possibly restrictions on dividends and might result in forced property sales. It seems to me that the current share price has probably priced in a breach of covenant and at least a further 20% drop in property values from 30/9/2008 - which I believe is a lot more pessimistic than is priced into UK property derivatives.
What bothers me is - why are the shares so cheap? Am I missing something?|
|flying pig: Skyship - only problem is the rate on the loans goes up in the event of a default - so may be less for shareholders. Agree in reality the share price covers this eventuality in my opinion. However I too bought at rather higher levels.|
|nickcduk: The current share price is absolute lunacy. When it fell to 26p earlier I was tempted to add a few more to my already too large a holding. Looks like a buyer has woken up and moved the price back up. Obviously a seller about who is selling indiscriminately so they could force it back lower.
Just been doing some sums and ive calculated that property values could fall another 13% or so before LTV terms are breached. In current market conditions you wouldn't think that was impossible. They could make a few more disposals or else they could get rid of the dividend to preserve cash. The dividend costs about about £20m a year. If they used that cashflow to reduce debt then the portfolio could fall another 19% over the next year and the LTV would still be safe.
Shares currently seem to be pricing a pretty high chance the company goes to wall. Other companies with higher gearing and lower FFO are trading at a much narrower discount to NAV.
Apologies Skyship for replying so promptly to your post. If I had left it a few days you could have got in a lot cheaper :-( Still pretty confident we will have a happy ending even if we do get some short term pain.|
|flying pig: £64m cash - implies c 19p per share.
Reasonable % of dividend appears to be covered by cash generated from rental income after costs and interest on loans.
Property value has to drop c36% by my back of envelope calculation to equal share price, with still possibility of dividend. NB Implies yield on property rising from 6.2% to over 9.5%. Seems improbable. I may pick up a few.|
Ing Uk Real Estate Income Trust share price data is direct from the London Stock Exchange